The Kyrgyz National Bank, the central bank of Kyrgyzstan, reportedly has stated that the microfinance sector in the country is overheating. As the government-reported aggregate credit portfolio of the industry grew to UZS 15.7 billion (USD 85.4 million) in 2011, “growth of excessive indebtedness is observed with it.” This is despite regulations that have been passed with the intent of providing borrowers with “transparent pricing and the effective interest rate, as well as the right to refuse a credit even after signing the contract.” The Kyrgyz National Bank does not regard the current number of indebted borrowers as problematic, as they represent about 1 percent of total borrowers [1]. Comparable government data on microcredit portfolios for 2010 is not available.
As of 2010, 14 microfinance institutions (MFIs) in Kyrgyzstan report to the US-based nonprofit Microfinance Information Exchange (MIX) an aggregate gross loan portfolio of USD 231 million outstanding to 376,000 borrowers and aggregate deposits of USD 4.5 million. For the year 2009, 15 MFIs in Kyrgyzstan reported to MIX an aggregate gross loan portfolio of USD 247 million outstanding to 317,000 borrowers.
By Brendan Millan, Research Associate
About Kyrgyz National Bank: The Kyrgyz National Bank is the central bank of Kyrgyzstan. Under its 1997 charter, the bank implements monetary policy and establishes policy for banking operations, accounting and reporting.
Sources and Resources:
[1] 24 Press Club: “Overheating is Observed in the Microfinance Sector of Kyrgyzstan” by Irina Dudka. http://eng.24.kg/business/2012/03/14/23400.html
MicroCapital.org Article, February 25, 2012, “responsAbility Lends $4.5m to Microfinance Institutions in Romania, Bosniaand Herzegovina, Kyrgyz Republic”, https://www.microcapital.org/microcapital-brief-responsability-lends-4-5m-to-microfinance-institutions-in-romania-bosnia-and-herzegovina-kyrgyz-republic/
MicroCapital.org Article, November 16, 2011, “European Bank for Reconstruction and Development (EBRD) Loans $10m to UniCredit, Bank of Kyrgyz Republic”, https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-loans-10m-to-unicredit-bank-of-the-kyrgyz-republic/
MicroCapital.org Article, February 3, 2011, “European Bank for Reconstruction and Development (EBRD) Loans $3m to Microfinance Provider Kompanion Financial Group of Kyrgyzstan,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconst…
MicroCapital.org Article, October 18, 2011, “European Bank for Reconstruction and Development (EBRD) to Loan Equivalent of $2m in Local Currency to Frontiers Microlending to On-Lend to Microfinance Institutions in Kyrgyzstan, Tajikistan, Kazakhstan”, https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-to-loan-equivalent-of-2m-in-local-currency-to-frontiers-microlending-to-on-lend-to-microfinance-institutions-in-kyrgyzstan/
MicroCapital Universe Profile: Kyrgyz National Bank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Kyrgyz+National+Bank#Contact_Information
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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